The Return of the Long-Run Phillips Curve
This paper integrate microfoundations of wage staggering into a simple dynamic general equilibrium model with rational expectations. In this context we show that a permanent increase in money growth leads to a permanent increase in the rate of inflation and a permanent reduction in the level of unemployment. In short, we derive a microfounded long-run downward-sloping Phillips curve.
|Date of creation:||Jan 2003|
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- repec:nbr:nberre:0126 is not listed on IDEAS
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"A Reappraisal of the Inflation-Unemployment Tradeoff,"
479, Queen Mary University of London, School of Economics and Finance.
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"Aggregate Dynamics and Staggered Contracts,"
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